State Aid Law Blog

State Aid Uncovered Blog

In Lexxion’s State Aid Uncovered blog, Prof. Phedon Nicolaides publishes weekly critical analyses of recent State aid judgments and decisions. Each post presents the key points of a court judgment or EU Commission decision, places it in the context of similar case law or practice, assesses the underlying reasoning and highlights any inconsistencies or contradictions.

Guest contributions from other State aid experts will also be published on the blog at irregular intervals to complement the content of the blog posts.

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5. December 2017  |   State Aid Uncovered by Phedon Nicolaides

Imputability of an Aid Measure to the State Does not Require a Counterfactual
State Aid Blogs - 05.12.Imputability of Aid State aidz
The fact that the state owns an undertaking is not enough to prove that the decisions of that undertaking can be attributed to the state. However, it is sufficient that the state was involved in the particular decision that transferred state resources for the benefit of another undertaking.   Introduction Several recent articles on this blog have examined the concept […]
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30. November 2017  |   State Aid Uncovered by Phedon Nicolaides

The Legal Basis of the (In)compatibility of Aid Must be Clear
State Aid Blogs - m 3 2
The European Commission may withdraw a decision, but before it adopts a new decision it must give an opportunity to interested parties to submit their comments, especially, if it changes the legal basis of the assessment of the compatibility of the aid.   Introduction The most frequent reasons for which the Commission finds aid to be incompatible with the internal […]
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21. November 2017  |   State Aid Uncovered by Phedon Nicolaides

i) Transfer of State Resources, ii) Non-recovery of Incompatible Aid, iii) Primacy of Agricultural Policy over Competition Policy
State Aid Blogs - 21.11.State resources State control
Private resources that come under the control of a public authority become state resources. The only defence for not recovering incompatible aid is absolute impossibility. Agricultural policy objectives take precedence over those of competition policy. Introduction This article reviews a case involving transfer of state resources and a case concerning failure to recovery of incompatible State aid. It also draws […]
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14. November 2017  |   State Aid Uncovered by Phedon Nicolaides

Existing v New Aid
State Aid Blogs - m 4 1
Any alteration of an existing aid measure can affect the substance of the measure itself. A deviation from the conditions of authorisation may turn existing aid into new aid. Alteration or deviation from the conditions of authorisation that affect the compatibility of an existing aid measure, can result in the granting of new aid. A Member State that alters an […]
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7. November 2017  |   State Aid Uncovered by Phedon Nicolaides

Indirect v Secondary Effects of State Aid
State Aid Blogs - 07.11.sardinia airport State aid
The prohibition of State aid in Article 107(1) of the Treaty applies both to the direct and indirect beneficiaries of aid. The direct and indirect beneficiaries are those who are intentionally targeted by the aid. Secondary effects are benefits which are inherent in an aid measure and which are not targeted at specific undertakings.   Introduction Public funding for the […]
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1. November 2017  |   State Aid Uncovered by Phedon Nicolaides

Activities Linked to State Prerogatives
State Aid Blogs - 01.11.17 State aid
Economic activities which cannot be separated from the exercise of public powers cease to be economic in nature.   Introduction The dividing line between economic and non-economic activities is in a permanent state of flux. Although it is now clear that some activities fall within the powers and prerogatives of the state, while many others are carried out by the […]
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24. October 2017  |   State Aid Uncovered by Phedon Nicolaides

Private Creditor Test
State Aid Blogs - SAH Blog26 GBERd
The Commission must apply the private creditor test even if a Member State does not request it or believes that it is not relevant.   Introduction Private investors always have two options: to invest or not to invest. They choose the option that generates the largest amount of profit or revenue. Similarly, private creditors also have two options: call in […]
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17. October 2017  |   State Aid Uncovered by Phedon Nicolaides

State Resources and Imputability
State Aid Blogs - 17.10. imputability stateaid
When the state acts in its capacity as legislator it is not presumed to direct the resources of undertakings it owns and over which it can exercise dominant influence as a shareholder. Introduction On 13 September 2017, the Court of Justice replied to a request from a national court to advise it on the concept of state resources [case C‑329/15, […]
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10. October 2017  |   State Aid Uncovered by Phedon Nicolaides

Pitfalls in the Use of De Minimis Aid
State Aid Blogs - 05.12.Imputability of Aid State aidz
Calculating de minimis aid according to the average amount of aid received by undertakings is wrong. Introduction It appears that all Member States grant de minimis aid, even though some tend to grant it more easily than others. De minimis aid can be used to subsidise any costs, including those which are not eligible under other State aid rules. The […]
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4. October 2017  |   State Aid Uncovered by Phedon Nicolaides

The Necessity and Proportionality of Regional Aid
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The Commission must open the formal investigation procedure when it has serious doubts about the compatibility of State aid. The aid that is necessary to induce a company to locate its investment in an assisted region is the amount that covers the difference in costs between the assisted region and the best alternative location. This amount is also proportional.   […]
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3. May 2017  |   State Aid Uncovered by Phedon Nicolaides

Identification of the Reference Tax System: The Case of a Tax on Advertising Turnover
State Aid Blogs - m 20
Turnover taxes should be levied at a single rate. Introduction This is the fourth case involving turnover taxes that have been declared to be incompatible with the internal market [see Commission decision 2017/329].[1] A brief summary was published here on 13 December 2016 [http://stateaidhub.eu/blogs/stateaiduncovered/post/7697]. The reasoning of the Commission follows closely that of the other cases. However, what makes this case […]
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26. April 2017  |   State Aid Uncovered by Phedon Nicolaides

A Postscript on Brexit and State Aid
State Aid Blogs - m 21
A short note on the previous blog post on State aid control in the UK after its withdrawal from the EU.   A few weeks ago, I wrote an article on State aid control in the UK after its withdrawal from the European Union [http://stateaidhub.eu/blogs/stateaiduncovered/post/8330]. In that article I suggested that the UK would maintain the same or a similar […]
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25. April 2017  |   State Aid Uncovered by Phedon Nicolaides

Public Support for Nature Conservation is not State Aid
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A nominal price may be charged for genuine non-economic services as long as it supports the achievement of the non-economic objective and covers only a small part of total costs.   Introduction Germany notified two measures of support for nature conservation in Saxony-Anhalt. Measure 1 [SA.45645] concerned projects of nature conservation and landscape maintenance.[1] Measure 2 [SA.46073] concerned aid to associations […]
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18. April 2017  |   State Aid Uncovered by Phedon Nicolaides

Ex Post Definition of the Method of Compensation Makes State Aid Incompatible with the Internal Market
State Aid Blogs - m 23
Compliance with public service obligations imposed on a provider of services of general economic interest should not be left to the discretion of that provider.   Introduction Last week’s article examined a public service obligation for providing maritime links to Corsica (view it here: http://stateaidhub.eu/blogs/stateaiduncovered/post/8370). This week’s article reviews a similar obligation for maritime links to the neighbouring island of Sardinia. […]
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11. April 2017  |   State Aid Uncovered by Phedon Nicolaides

The Need for Public Services Is Shown by Absence of Private Services
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The scope of public service obligations must be proportional to the identified market failure.   Introduction On 1 March 2017, the General Court dismissed the application of Societe Nationale Maritime Corse Mediterranee [SNCM] against the Commission [case T-454/13, SNCM v Commission].[1] The Commission had found in decision 2013/435 that SNCM received incompatible State aid that had to be recovered. SNCM carried […]
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4. April 2017  |   State Aid Uncovered by Phedon Nicolaides

State Aid on the Day after the Exit of the UK from the EU
State Aid Blogs - m 25
The UK will “take back control” over State aid. With it will come the challenge of following EU law and practice. Introduction Last June I wrote an article on how the withdrawal of the UK from the EU could affect the application of State aid rules in the UK. The article concluded with the following prediction. “The UK will soon […]
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28. March 2017  |   State Aid Uncovered by Phedon Nicolaides

Altmark Requires Efficiency; Article 106(2) TFEU Does Not!
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The provider of a service of general economic interest does not have to be more efficient than the “typical undertaking” in its sector.   Introduction   On 8 March 2017, the Court of Justice rendered its judgment in case C‑660/15 P Viasat Broadcasting v European Commission.[1] Viasat Broadcasting appealed against the judgment of the General Court of 24 September 2015 in […]
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21. March 2017  |   State Aid Uncovered by Phedon Nicolaides

Support for Illiquid but Solvent Banks
State Aid Blogs - m 27
State aid may be granted to solvent banks which face temporary liquidity difficulties.   Introduction State aid rules have their own logic and are applied independently of other policy areas. However, in certain situations, the Commission enforces State aid rules in conjunction with linked provisions in other fields. A typical example is taxes levied on agricultural products to raise revenue […]
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14. March 2017  |   State Aid Uncovered by Phedon Nicolaides

PART II: Ex Ante Assessment and Ex Post Evaluation of Risk Finance Measures
State Aid Blogs - 21.11.State resources State control
A well-designed State aid measure is preceded by a rigorous ex ante study that identifies market failure. The objectives of a well-designed measure address directly the nature and magnitude of the identified market failure. Read PART I: Ex Ante Assessment and Ex Post Evaluation of Risk Finance Measures from 7 March 2017. Ex Post Evaluation Plan Ex post evaluation focuses on i) […]
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7. March 2017  |   State Aid Uncovered by Phedon Nicolaides

PART I: Ex Ante Assessment and Ex Post Evaluation of Risk Finance Measures
State Aid Blogs - StateAidHub blogpost23
A well-designed State aid measure is preceded by a rigorous ex ante study that identifies market failure. The objectives of a well-designed measure address directly the nature and magnitude of the identified market failure.   Introduction The European Commission has approved, with decision SA.40991, amendments to two existing aid measures: Enterprise Investment Scheme [EIS] and Venture Capital Trust [VCT] in […]
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